May 14, 2001, 9:47 AM — With the mania -- and money -- for all things Internet having passed, e-business investments no longer get rubber stamp go-aheads from senior management. For anyone who’s responsible for implementing online initiatives -- this means that now is the time to revamp the ways you present and sell e-business projects.
E-business spending soared in the late 1990s, as entire industries hopped onto the Web bandwagon. But in many cases, companies were building out their network infrastructures and launching projects simply to keep up with the competition. Gripped by a land-grab mentality, firms across a wide range of vertical industries cobbled together e-business systems based on short-term goals, rather than long-term strategy. The focus for many was to just get it done. And the result was that hardware, software and services were bought and deployed based primarily on factors such as compatibility with existing systems and "time to action" -- the number of days, weeks or months it would take to get it up and running.
In 2001, we’re seeing a shift from time to action, to time to business impact. This new concentration on business value, and measurable return on investment, is putting the "business" back into e-business. Senior management is taking more time to scrutinize proposed e-business investments and how they impact long-term goals. As a result, managers whose livelihoods depend on successfully executing Internet-based strategies -- especially CIOs and senior e-business executives -- must tailor their e-business proposals for this new environment.
The Fundamentals Still Apply
Technology issues, such as security and integration/compatibility, as well as resource issues, including technical skills and project costs, are still principal concerns. But now, the most important issue is the value that an e-business initiative can deliver over time. In fact, our research has shown that 70% of companies would be more motivated to invest in e-business by an improved understanding of business value than a better understanding of technical solutions.
Today, new e-business initiatives are likely to get the green light only when they can be justified as essential to overall business success. Put simply, there needs to be an iron-clad link between e-business investments and company strategy. To demonstrate that link to upper management, CIOs and e-business executives should do the following:
* Identify, then prioritize key areas for e-business investment by aligning them with overall corporate business goals
* Show the business impact of a planned e-business initiative
* Justify funding by defining ROI goals specific to the e-business project
* Set a stretch target for the project team and "benefit thresholds"
for staged investments
* Show how individual business areas or departments will benefit, then attract support and budget from those departments
